The most sweeping changes to our NHS since its inception were put in place on Monday. But as the new system grinds into gear the fight continues, including an immediate battle over the competition regulations at the heart of the ‘reforms’. There’s a chance to defeat this core element of the Government’s plans in Parliament this month, and we’re asking supporters to contact MPs and members of the House of Lords to ensure that they act.
Alice Hood's Archive
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Alice Hood
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Alice Hood
Public service pay was squeezed yet further in the Budget.
Most public sector workers have faced a two-year pay freeze – three years in local government - followed by the prospect of two years with increases capped at a measly 1 per cent, leaving real wages and living standards falling. Today the Chancellor announced yet another year of average increases capped at 1 per cent. And in the small print of the Budget document (p73) he sneaked in an extra year on top of that for some civil servants. Some groups of civil servants (such as the Department for Work and Pensions’ 95,000-strong workforce, including many low-paid Jobcentre staff) entered the pay freeze ahead of the rest of the public sector so would have expected to come out of the cap in 2014. But Osborne has slipped a fourth year of pay capped well below inflation for these workers into his Budget plans.
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Alice Hood
A flurry of activity by unions, health specialists, politicians and campaigners has borne fruit today, with the announcement that the Government will re-write the NHS competition regulations that have caused such a furore. But vigilance will be needed to make sure the government can’t get away with a watered-down version of the same thing.
As I wrote last week, the regulations would have had the effect of forcing NHS services into compulsory competitive markets. They undermined assurances given by ministers during the debates on the Health Act, and could have come into law without so much as a debate or a vote had they followed the usual process set out by the government.
When the TUC asked people to write in about the regulations last week, so we could share concerns with a key Lords scrutiny committee, thousands of people responded in just a few hours. Thousands have also lobbied MPs in what was one of the biggest responses we’ve seen to an online action.
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Alice Hood
Secretary of State for Health Jeremy Hunt has proposed new regulations under section 75 of the Health and Social Care Act. The Act became law last March after a long and hard-fought campaign, and these regulations (SI 257) are secondary legislation. This means they’re assumed to simply deliver the detail of the original Act and so, left alone, they would become law on 1 April without a debate or a vote.
But the regulations go far beyond the warm words of ministers during the passage of the Health and Social Care Act. They attempt to sneak a big step towards privatisation through the back door.
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Alice Hood
Amid the grim news from the Autumn Statement, many public sector workers will have breathed a rare sigh of relief when the Chancellor announced that the government would not be pressing ahead with local or regional pay in the NHS, civil service or prisons. But teachers have been singled out for a divisive and damaging experiment with what effectively amounts to individualised pay.
The Chancellor said:
“We are today publishing the reports we commissioned from the pay review bodies on market-facing pay. We commit to implement these reports. This means continuing with national pay arrangements in the NHS and Prison Service, and we will not make changes to the civil service arrangements either.
But the School Teachers’ Review Body does recommend much greater freedom to individual schools to set pay in line with performance. And the Education Secretary will set out how this will be implemented.”
The climbdown on regional pay in health, prisons and the civil service is hugely important. A broad alliance including MPs of all parties, councils of all stripes, the public, academics (£) and businesses as well as trade union members from public and private sectors spoke out against the proposals. The economic damage, risks to services and unfairness of the idea were compounded by the lack of evidence to support it from economic theory or private sector practice.
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Alice Hood
Today the TUC published research by the New Economics Foundation which comprehensively debunks the government’s arguments for localising public sector pay. It also models the economic impact that the proposals could have, finding that they could cost the economy up to £9.7bn per year. Even in the ‘best case’ scenario, accepting the government’s highly contestable argument that public sector pay crowds out private sector growth, the economy would take a hit of £2.7bn per year. I’ve got a post over at Left Foot Forward with more details.
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Alice Hood
Over the last few days there have been reports that the Chancellor is considering introducing regional or local pay for some public sector workers in the Budget.
As colleagues have blogged before, public sector pay supports local and regional economies, ensures fairness and transparency and promotes equal pay. Moving away from this to a system that would entrench the North-South divide for generations is unfair, inefficient, makes no economic sense, will increase inequality and is simply not supported by the evidence. A move at this stage would also pull the rug from under the independent pay review bodies, who have already been asked to investigate the question and won’t report until July.
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Alice Hood
The Autumn Statement paints a pretty bleak picture of the next few years for public sector workers, characterised by ongoing cuts and squeezed living standards.
After a two year pay freeze (and even longer in local government), the Chancellor announced today that pay increases in the public sector will be capped at an average 1% for the following two years. This comes at the same time as the proposed average 3.2% increase in pension contributions (phased in over 3 years), and inflation rates predicted to be around 3%. The TUC has calculated that this leaves public sector workers facing an average cut in their living standards of 16.5% by 2014-15.
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Alice Hood
Two stories published in the last few days should convince any remaining doubters that the Government’s promises to protect the NHS are in tatters. Cuts, growing waiting lists and the massive top-down reorganisation of the NHS are all taking their toll.
Research published by the Royal College of Nursing today finds that more than 56,000 NHS posts are set to be cut. Half of these are clinical posts and one third of them are nursing roles. Particularly worrying is the finding that the pace of cuts is increasing. There are also a number of associated trends of cutting hours and replacing experienced staff with cheaper workers at lower grades.
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Alice Hood
The TUC published analysis today that shows more than 800,000 low paid public sector workers – 9 out of ten of them women – could lose out despite a government commitment to protect low earners from pension contribution increases.
The government is seeking an additional £2.8bn a year in contributions from members of public service pension schemes by 2014-15, phased in over the next three years. This is an average of 3.2% of pay, roughly a 50% increase on the contributions currently paid by many in the schemes (find more on our pensions justice site).

